Partnership Deepens Drilling Opportunities in the Middle East
ADNOC Drilling is the largest drilling company in the Middle East, with the total length of wells its drilled longer than digging to the center of the earth and continuing through to the other side. This week, Baker Hughes, a GE company, became its strategic equity partner.
It’s the first time in the 45-year history of the Abu Dhabi National Oil Company (ADNOC) Group that an international strategic partner has taken a direct equity stake in one of its existing services businesses. As part of the agreement, BHGE will acquire a five percent stake in ADNOC Drilling.
BHGE will be the sole provider of certain proprietary equipment and technologies related to the integrated drilling offering, supporting ADNOC Drilling’s growth and new business opportunities, including the potential to offer integrated drilling services outside the UAE.
Together, ADNOC Drilling and BHGE will deliver more competitive well completion times, greater drilling efficiencies and better well economics. It also will enable ADNOC to capture more value from every barrel of oil it produces, as it plans to grow its conventional drilling activity by 40% by 2025 and substantially ramp up unconventional wells.
ADNOC Drilling – which operates 60 land rigs, 20 (offshore) jackup rigs, and 11 island rigs – remain the sole rig provider to the ADNOC Group Companies and capitalize on ADNOC’s growing upstream activity by deploying its new integrated offering to capture up to 30% of the drilling and completion market over the next three years, as it demonstrates increasing drilling efficiencies and improved customer service levels.
“Importantly, it also will drive job creation and economic growth, as well as maintain a healthy level of competition in the dynamic UAE oilfield services market,” said H.E. Dr. Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC Group CEO.
The five percent stake, worth US$ 550 million, values ADNOC Drilling at approximately $11 billion.
The transformation of ADNOC Drilling will improve the integration of UAE private sector service providers, as well as create new career opportunities for ADNOC employees and support domestic economic growth. The partnership reinforces ADNOC’s in-country value creation strategy and demonstrates BHGE’s longstanding commitment to the country.
BHGE employs more than 1,000 employees in the UAE and supports customers with products and services spanning the entire oil and gas value chain.
Read more stories here about how BHGE helps the UAE and other countries in the Middle East, North Africa, Turkey and Pakistan region by providing fullstream capabilities.